Hi Horco, I doubt if any class action will be able to stop it from happening unfortunately, just won't happen quickly enough in my opinion. But keep pursuing it, one never knows and if everyone does nothing then it just allows them to get away with it time after time.
But class action may be an avenue for compensation if anywrong doing can be found, eg negligence or failure to disclosing information etc and then did people suffer a loss due to that act. The four major areas they maybe should look at in my view are
1. whether there was any negligence in not undertaking a capital raising when it first became known that there was issues with the loan (I would suggest when the cash on hand requirement was lifted from $5m to $15m may have been first indications). Given other circumstances now known re Off takes should this have been a trigger for action to safeguard our assets.
2. Were they trading insolvent? Not sure this one would help long term holders as would really just indicate our investment was "lost" earlier, but anyone who purchased shares after the insolvent date (if they were so trading) may have a good arguement that they suffered loss as company should have already been non trading. Could be some big dollars in just this, which is what's needed to get class action lawyers interested.
3. Was there failure to disclose information? Timely disclosure of price sensitive information should be looked into, examples may include
a. Force majeour notice from our only customer
b. Timing of major loan agreement changes vs when market informed ie that cash on hand increase requirement.
c. Timing of Off take agreement changes, eg when was the delayed payment on that last shipment agreed to vs when notified.
4. Was their any Insider trading? what parties knew of some information that the rest of the market may not of been aware aware of and Directors responsibilities to inform the whole market.
Anyway, there just some things that in my view they should look into to determine whether any breaches of responsibility or not, perhaps others can add to the list.
I am sure if you can get a class action started that many will join in as most just can't afford the time or cost to undertake action individually.
All the best
A40 Price at posting:
8.2¢ Sentiment: None Disclosure: Held
